JACKSON, Miss. (WJTV) – Mississippi lawmakers approved a plan to phase out the state income tax, cut the grocery tax and raise the gas tax, but the final outcome remains unclear.

The House voted 92-27 to concur with the Senate in its changes to House Bill 1. The bill now advances a tax overhaul that would cut the income tax by a quarter of a percentage point each year, starting in 2027 with future cuts tied to economic growth.

The plan lowers the grocery tax from seven to five-percent starting July 1, but it also adds a $0.09 gas tax hike over three years.

Some lawmakers question shifting from income tax to higher gas taxes, warning it could burden lower-income residents. There’s also a big change for the Public Employees Retirement System (PERS). State employees hired after March 2026 would split contributions between a traditional pension and a 401(k)-style plan.

The bill remains on a motion to reconsider, leaving its final status in limbo. On Wednesday, the House also passed its amended version of Senate Bill 3095, and it calls for the complete elimination of income tax, which Gov. Tate Reeves (R-Miss.) has pushed for. The governor has not said whether he would sign either bill.